HOUSTON, July 22 /PRNewswire-FirstCall/ -- ExpressJet Holdings,
Inc. (NYSE:XJT), a regional and charter airline operator, today
reported a second quarter loss, excluding special items, of $11.5
million or $0.78 per common share versus $13.1 million or $2.56 per
common share for the same period in 2008. These results represent
continued downward pressure on aircraft utilization due to
decreased travel demand experienced across the airline industry.
(Logo: http://www.newscom.com/cgi-bin/prnh/20080221/NYFNSN01LOGO)
Including special items, ExpressJet reported a second quarter loss
of $13.1 million or $0.88 per common share versus $34.3 million or
$6.68 per common share during second quarter 2008. Year-to-date
excluding special items, ExpressJet lost $22.2 million or $1.39 per
common share. Including special items, ExpressJet reported a
year-to-date loss of $24.5 million or $1.54 per common share.
"These results are reflective of the worldwide drop in passenger
revenues, which are forecast to continue through 2009," said Jim
Ream, President and Chief Executive Officer. Ream added, "While
these results are disappointing, ExpressJet's competitive position
continues to improve through superior customer service for network
carriers and by expanding customer bases in our charter and ground
handling businesses." Operational Overview Scheduled Flying Under
its agreement with Continental, ExpressJet flew 163,987 block hours
during the second quarter using 214 aircraft versus 183,649 block
hours during the same period in 2008 using 205 aircraft. This
represents a decrease of approximately 11% over second quarter
2008, and is slightly higher than the announced 6% - 9% annual
reduction in 2009 industry capacity. The Continental Express
average aircraft utilization during the quarter totaled 8.42 hours
per day versus 9.84 hours per day during second quarter 2008. These
results include the impact of ExpressJet's reduction in flying to
Mexico during May and June due to the H1N1 pandemic. Despite
decreased demand levels across the industry, ExpressJet expects to
continue flying 214 airplanes for Continental under the capacity
purchase agreement and to date, has not received notice from
Continental regarding its right to reduce the covered aircraft to
190 on the amended agreement's first anniversary, July 1, 2009. In
second quarter 2009, ExpressJet generated 2 billion revenue
passenger miles on 2.5 billion available seat miles producing a
load factor of 79% within the Continental Express network. For the
six months ended June 2009, ExpressJet flew 321,593 block hours
compared to 357,742 block hours during same period in 2008.
Year-to-date ExpressJet generated 3.7 billion revenue passenger
miles on 4.9 billion available seat miles producing a load factor
of 75.5% within the Continental Express network. Corporate Aviation
ExpressJet flew 4,845 block hours during the second quarter within
its corporate aviation division, including those hours flown under
a short-term agreement with United Air Lines for ten 50-seat
aircraft. ExpressJet increased revenues 41.8% during second quarter
2009 versus second quarter 2008, excluding fuel because it is
treated as a pass-through expense. Block hours generated for the
six months ended June 2009 within corporate aviation totaled 8,076.
ExpressJet's fleet within the Corporate Aviation division consisted
of eight 41-seat aircraft and twenty-two 50-seat aircraft during
the quarter, totaling an operating fleet of 30 aircraft. All Flying
ExpressJet operated 244 aircraft during second quarter 2009
compared to 274 aircraft during second quarter 2008. Aviation
Services During the quarter, ExpressJet managed 41 contracts at 30
stations for a total aircraft turn count of 19,670 - an increase of
7.7% over first quarter 2009. Financial Overview ExpressJet
generated $170.6 million in revenue during the three months ended
June 30, 2009. Under the amended capacity purchase agreement,
Continental paid ExpressJet $149.4 million in block hour revenue
and pass-through expense reimbursements. The year-over-year
decrease in passenger revenue stems from numerous factors
including: suspended flying for both the ExpressJet branded and
Delta operations, amended agreement with Continental effective July
1, 2008 and decreased block hours due to a global economic
recession. Despite the economic downturn and seasonality trends,
revenue earned during the second quarter in the corporate aviation
division totaled $12.8 million, representing a 26.6% increase
year-over-year. Second quarter revenue from aviation services
(ground handling and other) totaled $8.4 million versus $11.3
million in second quarter 2008 primarily due to the sale of
American Composite, LLC and the suspension of ancillary revenue
from ExpressJet branded operations. Year-to-date, ExpressJet earned
$340.3 million in revenue, including $293.6 million in passenger
revenue from Continental Express flying, $28.9 million through
corporate aviation and $17.9 million via aviation services. At
these utilization levels, ExpressJet expects that approximately 30%
of its costs for Continental Express flying will be pass-through
expenses. Of the remaining costs associated with Continental
Express flying, ExpressJet expects that 60% will vary as
utilization increases and 40% will be fixed. During the quarter,
ExpressJet reached a tentative agreement with its dispatchers
represented by the Transport Workers Union of America. The
agreement became amendable July 2009 and the vote is expected
during the last week of the month. ExpressJet ended the second
quarter 2009 with $116 million in cash, cash equivalents and
short-term investments. The cash balance included $20.3 million in
restricted cash and $38.5 million in short-term investments,
primarily auction rate securities, after accounting adjustments to
impair the value of these assets. ExpressJet intends to continue
monitoring the auction rate securities market to attempt to
monetize the assets at or near face value and initiated litigation
against Royal Bank of Canada related to such investments brokered
by the firm. ExpressJet spent approximately $568,000 under its
previously announced securities repurchase program to buy back
394,715 shares in open market and privately negotiated
transactions, and $75,000 par value of its 11.25% Secured
Convertible Notes due 2023. The total remaining in the program,
after accounting for repurchases made during second quarter 2009,
is approximately $5.5 million. The company expects any future
purchases of the notes or stock to be made from time to time in the
open market or in privately negotiated transactions. After
accounting for the debt repurchases made during the quarter, the
outstanding balance on ExpressJet's 11.25% Secured Convertible
Notes due 2023 is $58.9 million. This balance represents the par
value due to noteholders when the notes become due August 1, 2023.
Capital expenditures totaled $1.5 million during the quarter
compared to $4.3 million during the second quarter 2008.
Year-to-date capital expenditures total $2.8 million and the
company plans to spend between $2 and $3 million during the second
half of 2009 to meet operational requirements. The company will
review its second quarter 2009 results on Wednesday, July 22, 2009
at 10:00 a.m. EDT (9:00 a.m. CDT). A live webcast of the call will
be available at http://www.expressjet.com/. To access the
conference call by phone, dial (866) 638-3022 approximately 10
minutes prior to the scheduled start time and ask to join the
ExpressJet call. International callers should dial (630) 691-2765.
Corporate Background ExpressJet Holdings operates several divisions
designed to leverage the management experience, efficiencies and
economies of scale present in its subsidiaries, including
ExpressJet Airlines, Inc. and ExpressJet Services, LLC. ExpressJet
Airlines serves 128 scheduled destinations in North America and the
Caribbean with approximately 1,160 departures per day. Operations
include a capacity purchase agreement for Continental; providing
clients customized 41-seat and 50-seat charter options
(http://www.expressjet.com/charter); and supplying third-party
aviation and ground handling services. For more information, visit
http://www.expressjet.com/. This release contains forward-looking
statements. Statements including words such as "believes,"
"intends," "plans," "anticipates, "estimates," "projects,"
"expects" or similar expressions represent forward-looking
statements that are based on the Company's expectations in light of
facts known by management on the date of this release.
Specifically, statements regarding ExpressJet's future results of
operations, operating costs, business prospects, growth and capital
expenditures, including plans with respect to its fleet, are
forward-looking statements. The forward-looking statements in this
release reflect the Company's plans, assumptions and expectations
about future events and are subject to uncertainties, many of which
are outside ExpressJet's control. Important factors that could
cause actual results to differ materially from the expectations
expressed or implied in the forward-looking statements include
known and unknown risks. The five key areas of the known risks that
could significantly impact the company's revenues, operating
results and capacity include: operations under the Company's
capacity purchase agreement with Continental Airlines, Inc. may no
longer be profitable; charter operations and other aviation
services may affect ExpressJet's ability to operate profitably;
rising costs, a global, economic recession and the highly
competitive nature of the airline industry; the profile of the
Company's current shareholders; and regulations, including listing
regulations for publicly traded companies, and other factors. For
further discussions of these risks and others, please see the
sections entitled "Risk Factors", as well as other sections, of
ExpressJet's filings with the Securities and Exchange Commission.
The events described in the forward-looking statements might not
occur or might occur to a materially different extent than
described in this release. ExpressJet undertakes no duty to update
or revise any forward-looking statements, whether as a result of
new information, future events or otherwise. EXPRESSJET HOLDINGS,
INC. AND SUBSIDIARIES FINANCIAL SUMMARY (In thousands, except per
share data) Three Months Ended June 30, Increase/ 2009 2008
(Decrease) Operating Revenue Passenger $149,386 $425,742 (64.9%)
Corporate Aviation 12,820 10,125 26.6% Ground handling and other
8,382 11,309 (25.9%) 170,588 447,176 (61.9%) Operating Expenses:
Wages, salaries and related costs 79,619 108,828 (26.8%)
Maintenance, materials and repairs 40,869 56,408 (27.5%) Other
rentals and landing fees 16,230 29,065 (44.2%) Depreciation and
amortization 7,555 8,788 (14.0%) Outside services 6,132 16,591
(63.0%) Aircraft rentals 5,472 86,758 (93.7%) Ground handling 2,496
25,940 (90.4%) Aircraft fuel and related taxes 2,399 95,962 (97.5%)
Marketing and distribution 339 11,515 (97.1%) Special charges -
22,119 n/m Other operating expenses 20,358 29,000 (29.8%) 181,469
490,974 (63.0%) Operating Loss (10,881) (43,798) (75.2%)
Nonoperating Income / (Expense): Gain on extinguishment of debt -
1,530 n/m Impairment charges on investment - (5,231) n/m
Amortization of debt discount (1,548) (6,717) (77.0%) Interest
expense (2,110) (2,515) (16.1%) Interest income 289 1,399 (79.3%)
Capitalized interest 66 263 (74.9%) Equity investments loss, net -
(378) n/m Other, net 10 1,531 (99.3%) (3,293) (10,118) (67.5%) Loss
before Income Taxes (14,174) (53,916) (73.7%) Income Tax Benefit
1,077 19,608 (94.5%) Net Loss $(13,097) $(34,308) (61.8%) Basic
& Diluted Loss per Common Share $(0.88) $(6.68) (86.8%) Shares
Used in Computing Basic & Diluted Loss per Common Share 14,885
5,133 190.0% EXPRESSJET HOLDINGS, INC. AND SUBSIDIARIES FINANCIAL
SUMMARY (In thousands, except per share data) Six Months Ended June
30, Increase/ 2009 2008 (Decrease) Operating Revenue Passenger
$293,574 $849,069 (65.4%) Corporate Aviation 28,870 23,827 21.2%
Ground handling and other 17,853 22,448 (20.5%) 340,297 895,344
(62.0%) Operating Expenses: Wages, salaries and related costs
159,294 223,434 (28.7%) Maintenance, materials and repairs 79,671
112,053 (28.9%) Other rentals and landing fees 29,124 58,752
(50.4%) Depreciation and amortization 15,259 17,426 (12.4%) Outside
services 13,727 33,310 (58.8%) Aircraft rentals 10,944 173,516
(93.7%) Ground handling 5,601 51,952 (89.2%) Aircraft fuel and
related taxes 5,620 193,949 (97.1%) Marketing and distribution
1,665 23,406 (92.9%) Special charges - 22,119 n/m Other operating
expenses 41,289 64,208 (35.7%) 362,194 974,125 (62.8%) Operating
Loss (21,897) (78,781) (72.2%) Nonoperating Income / (Expense):
Gain on extinguishment of debt - 3,537 n/m Impairment charges on
investment - (18,892) n/m Amortization of debt discount (2,329)
(13,229) (82.4%) Interest expense (4,138) (4,871) (15.0%) Interest
income 636 3,762 (83.1%) Capitalized interest 128 663 (80.7%)
Equity investments loss, net (377) (1,062) (64.5%) Other, net (74)
1,610 n/m (6,154) (28,482) (78.4%) Loss before Income Taxes
(28,051) (107,263) (73.8%) Income Tax Benefit 3,550 39,771 (91.1%)
Net Loss $(24,501) $(67,492) (63.7%) Basic & Diluted Loss per
Common Share $(1.54) $(13.16) (88.3%) Shares Used in Computing
Basic & Diluted Loss per Common Share 15,952 5,130 211.0%
EXPRESSJET HOLDINGS, INC. AND SUBSIDIARIES FINAL STATISTICS
Continental Corporate Express Aviation Three Months Ended June 30,
2009 Revenue Passenger Miles (millions) 2,014 Available Seat Miles
(ASM) (millions) 2,548 Passenger Load Factor 79.0% Block Hours
163,987 4,845 Departures 87,675 Six Months Ended June 30, 2009
Revenue Passenger Miles (millions) 3,723 Available Seat Miles (ASM)
(millions) 4,934 Passenger Load Factor 75.5% Block Hours 321,593
8,076 Departures 168,733 Non-GAAP Financial Measures (In thousands,
except per share data) Three Months Ended June 30, 2009 2008 Net
Income Reconciliation: Net loss $(13,097) $(34,308) Adjustments for
special items (gains): Add: Realized loss from impairment charge on
investments (1) - 17,343 Add: Realized loss from special charges(2)
- 461 Add: Realized loss from extinguishment of debt(3) - (996)
Add: Realized loss from amortization of debt discount(4) 1,548
4,373 Net loss excluding special items (gains)(5) $(11,549)
$(13,127) Earnings / (Loss) Per Share Reconciliation: Diluted loss
per share $(0.88) $(6.68) Adjustments for special items (gains):
0.10 4.12 Diluted loss per share, excluding special item (gains)(5)
$(0.78) $(2.56) (1) During the second quarter of 2008, we
recognized charges including an $8.3 million, net of taxes,
impairment of goodwill related to the original capacity purchase
agreement with Continental Airlines, a $5.6 million, net of taxes,
impairment charge to write off certain capital assets, and a $3.4
million, net of taxes, charge to fully impair our investment
balance in Wing Holding, LLC. (2) During the second quarter of
2008, we recognized a special charge of $0.5 million, net of taxes,
related to previously disputed base closure costs associated with
the original capacity purchase agreement with Continental Airlines.
(3) Effective January 1, 2009, ExpressJet adopted Financial
Accounting Standards Board's Staff Position No. APB 14-1,
"Accounting for Convertible Debt Instruments that May Be Settled in
Cash upon Conversion (Including Partial Cash Settlement)", which
clarifies the accounting for convertible debt instruments that may
be settled in cash (including partial cash settlements) upon
conversion. Repurchases of our convertible notes during the second
quarter of 2008 resulted in a gain on extinguishment of debt of $1
million, net of taxes, within the scope of FSP APB 14-1. Such gains
were calculated as the difference between the fair value of the
liability component immediately prior to extinguishment and its
book value. (4) The financial statements for the three months ended
June 30, 2008 were adjusted to reflect an additional $4.4 million,
net of taxes, in amortization of debt discount as a result of the
adoption of Financial Accounting Standards Board's Staff Position
No. APB 14-1, "Accounting for Convertible Debt Instruments that May
Be Settled in Cash upon Conversion (Including Partial Cash
Settlement)". In 2008, we recorded $27.8 million in debt discount
related to the refinancing of our convertible notes. During the
second quarter of 2009, we recognized $1.5 million in amortization
of the debt discount recorded in 2008. (5) By excluding special
non-recurring items, these financial measures provide management
and investors the ability to measure and monitor ExpressJet's
performance on a consistent year-over-year basis. Non-GAAP
Financial Measures (In thousands, except per share data) Six Months
Ended June 30, 2009 2008 Net Income Reconciliation: Net loss
$(24,501) $(67,492) Adjustments for special items (gains): Add:
Realized loss from impairment charge on investments (1) - 26,035
Add: Realized loss from special charges(2) - 458 Add: Realized loss
from extinguishment of debt(3) - (2,285) Add: Realized loss from
amortization of debt discount(4) 2,329 8,546 Net loss excluding
special items (gains)(5) $(22,172) $(34,738) Earnings / (Loss) Per
Share Reconciliation: Diluted loss per share $(1.54) $(13.16)
Adjustments for special items (gains): 0.15 6.39 Diluted loss per
share, excluding special items (gains)(5) $(1.39) $(6.77) (1)
During the six months ended June 30, 2008, we recognized charges
including an $8.7 million, net of taxes, impairment charge on our
Auction Rate Securities, an $8.3 million, net of taxes, impairment
of goodwill related to the original capacity purchase agreement
with Continental Airlines, a $5.6 million, net of taxes, impairment
charge to write off certain capital assets, and a $3.4 million, net
of taxes, charge to fully impair our investment balance in Wing
Holding, LLC. (2) During the second quarter of 2008, we recognized
a special charge of $0.5 million, net of taxes, related to
previously disputed base closure costs associated with the original
capacity purchase agreement with Continental Airlines. (3)
Effective January 1, 2009, ExpressJet adopted Financial Accounting
Standards Board's Staff Position No. APB 14-1, "Accounting for
Convertible Debt Instruments that May Be Settled in Cash upon
Conversion (Including Partial Cash Settlement)", which clarifies
the accounting for convertible debt instruments that may be settled
in cash (including partial cash settlements) upon conversion.
Repurchases of our convertible notes during the six months ended
June 30, 2008, resulted in gains on extinguishment of debt of $2.3
million, net of taxes, within the scope of FSP APB 14-1. Such gains
were calculated as the difference between the fair value of the
liability component immediately prior to extinguishment and its
book value. (4) The financial statements for the six months ended
June 30, 2008 were adjusted to reflect an additional $8.5 million,
net of taxes, in amortization of debt discount as a result of the
adoption of Financial Accounting Standards Board's Staff Position
No. APB 14-1, "Accounting for Convertible Debt Instruments that May
Be Settled in Cash upon Conversion (Including Partial Cash
Settlement)". In 2008, we recorded $27.8 million in debt discount
related to the refinancing of our convertible notes. During the six
months ended June 30, 2009, we recognized $2.3 million in
amortization of the debt discount recorded in 2008. (5) By
excluding special non-recurring items, these financial measures
provide management and investors the ability to measure and monitor
ExpressJet's performance on a consistent year-over-year basis.
http://www.newscom.com/cgi-bin/prnh/20080221/NYFNSN01LOGO
http://photoarchive.ap.org/ DATASOURCE: ExpressJet Holdings, Inc.
CONTACT: Kristy Nicholas, Investor Relations of ExpressJet
Holdings, Inc., +1-832-353-1409 Web Site:
http://www.expressjet.com/
Copyright
